Forman v. Delaware Construction Co.

SHINN, P. J. Plaintiffs brought this action on their own behalf and on behalf of numerous other persons alleged to be similarly situated for the purpose of obtaining a declaratory judgment defining the rights and duties of the parties under certain contracts to purchase dwelling houses from defendants. An answer was filed by defendant and also a cross-complaint by which defendant sought to recover damages.

When the action came on for trial judgment was entered in favor of defendant, which recited that a general demurrer had been sustained to the complaint with leave to amend within 10 days, and that plaintiffs had not amended. Plaintiffs appeal.

The complaint alleged the following facts: On or about April 4, 1947, defendant was the owner of a tract of land in Los Angeles County; it filed its Notice of Intention to Sell and Answer to Questionnaire with the Real Estate ■ Commissioner ; thereby it represented that it intended to sell certain houses to be built on the land at a price of $10,000 for single houses and $14,000 for double houses and that sales would be made for a down payment of $1,000 or 10 per cent of the purchase price and monthly payments of $66.91 including principal, interest, taxes and insurance, the rate of interest to be 4 to 4% per cent with F.H.A. and 6.1. financing. It was alleged that defendant did not file with the commissioner a form of contract that it intended to use in the sale of the houses. Without notice to the commissioner defendant proceeded to sell and dispose of certain houses for from $10,500 to $12,750 each with down payments of $1,000 to $2,500 and monthly payments of from $75 to $116 with interest at the rate of 6 to 6% per cent; other charges were made for mortgage insurance, taxes and fire insurance. Plaintiff Forman agreed to pay $12,300 for a house and plaintiffs Coffey agreed to pay $12,864.73 for a house they purchased. Other purchasers to the number of 135 entered into contracts of purchase with defendant at prices substantially above the prices named in the above mentioned Answer to Questionnaire. It was alleged that a controversy existed between the several buyers and the defendant with respect to the validity of the contracts of purchase. Plaintiffs claimed they were [428]illegal because of the failure of defendant to comply with the requirements of law regulating the sale of real estate subdivisions, and the complaint listed numerous rights which the owners would have in case the contracts were void. It did not allege the existence of any controversy which did not depend upon the claimed invalidity of the' contracts. It was alleged that the defendant disputed all the claims and rights asserted by the several purchasers. The answer of defendant admitted that it had not filed with the Real Estate Commissioner a form of contract that it intended to use in the sale of houses and lots, and it denied that in its Answer to Questionnaire it represented that it would or that it did offer to sell single houses or double houses for the prices and upon the terms alleged in the complaint. It admitted that a controversy existed between plaintiffs and itself as to the legality of the contracts, the plaintiffs claiming them to be void and defendant claiming them to be valid and enforceable. Defendant also filed a cross-complaint accusing plaintiffs and others with having conspired to involve it in litigation and to harass and annoy it for the purpose of avoiding their obligations under the contracts, and obtaining other unfair advantages as the price of peace, for all of which defendant asked for compensatory and punitive damages.